Correlation Between Radcom and Kulicke
Can any of the company-specific risk be diversified away by investing in both Radcom and Kulicke at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Radcom and Kulicke into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Radcom and Kulicke and Soffa, you can compare the effects of market volatilities on Radcom and Kulicke and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Radcom with a short position of Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radcom and Kulicke.
Diversification Opportunities for Radcom and Kulicke
Poor diversification
The 3 months correlation between Radcom and Kulicke is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Radcom and Kulicke and Soffa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kulicke and Soffa and Radcom is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Radcom are associated (or correlated) with Kulicke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kulicke and Soffa has no effect on the direction of Radcom i.e., Radcom and Kulicke go up and down completely randomly.
Pair Corralation between Radcom and Kulicke
Given the investment horizon of 90 days Radcom is expected to generate 1.78 times more return on investment than Kulicke. However, Radcom is 1.78 times more volatile than Kulicke and Soffa. It trades about 0.17 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about 0.18 per unit of risk. If you would invest 1,055 in Radcom on September 1, 2024 and sell it today you would earn a total of 140.00 from holding Radcom or generate 13.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Radcom vs. Kulicke and Soffa
Performance |
| Timeline |
| Radcom |
| Kulicke and Soffa |
Radcom and Kulicke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radcom and Kulicke
The main advantage of trading using opposite Radcom and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radcom position performs unexpectedly, Kulicke can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kulicke will offset losses from the drop in Kulicke's long position.| Radcom vs. Shenandoah Telecommunications Co | Radcom vs. Anterix | Radcom vs. SK Telecom Co | Radcom vs. Liberty Broadband Srs |
| Kulicke vs. NXP Semiconductors NV | Kulicke vs. GSI Technology | Kulicke vs. MaxLinear | Kulicke vs. Texas Instruments Incorporated |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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